A recent report by the Institut de recherche en économie contemporaine (IREC) commissioned by OXFAM Québec1 shows that the carbon footprint of the eight largest Canadian banks is 1.9 billion tons, i.e. 2.6 times Canada’s GHG emissions and that if they were to unite to form a State, this new country would be the fifth-largest GHG emitter in the world. This report seems to contradict directly the commitments that the Bank made last year in response to our shareholder proposal regarding the setting of interim targets and the adoption of a plan to reach them.
While we acknowledge that the Bank is making tangible efforts to support and accelerate the climate transition, it could do better and could even set an example for other corporations. Allow us to quote two observations taken from IREC’s report:
“First, not only none of Canada’s major deposit-taking institutions are committed, in the short or medium term, to withdraw from the fossil fuel industry, but, in addition, they all persist in presenting themselves as actors in the energy transition and sustainable funding of activities aiming either at decarbonizing the mining, transformation and/or consumption processes of fossil fuels, or at supporting the diversification of the “green” asset portfolios held by the corporations in this very industry, particularly in the green technology and renewable energy sectors.
Second, even with respect to their financial commitments in favour of the energy and environmental transition, Canada’s deposit-taking institutions are still relatively lacking in ambition. For instance, the C$850 billion amount promised in the aggregate by BMO, RBC, Scotia, CIBC and TD for the 2020-2030 period, although not negligible, will ultimately account for only two thirds of the assets that they previously committed in fossil energies between 2016 and 2020 alone, exceeding C$1,300 billion.
Moreover, overall, many of the mutual and exchange-traded funds of Canada’s eight major deposit-taking institutions, including ESG or "green" funds have yet to align with the Paris Agreement targets, exceeding the maximum exposure to carbon-related industries that would limit global warming to less than two degrees.” The Bank – which is one of the banks that the aforementioned report directly targets, in particular in its recommendation #4 – wields significant financial power and must fulfill responsibilities that are just as significant by delivering on its commitments, by officially adopting and issuing a concrete plan.